If ending inventory in Period 1 is overstated, gross profit in Period 2 is:
A) overstated.
B) understated.
C) not affected.
D) the same as in Period 1.
B) understated.
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The depreciation method using a fixed rate applied to the undepreciated cost of the asset each year, resulting in successively smaller depreciation charges as the undepreciated cost diminishes year by year is called the
a. declining-balance method. b. sum-of-the-years'-digit method. c. units-of-production method. d. straight-line method.
Individuals with access authority to general ledger accounts should not prepare journal vouchers
Indicate whether the statement is true or false
The formula for calculating the cash ratio is ________.
A) (Cash) / Total liabilities B) (Cash + Cash equivalents) / Total current liabilities C) (Cash + Cash equivalents) / Total assets D) (Cash equivalents) / Total current liabilities
Extraordinary repairs are recorded with a debit to Accumulated Depreciation
Indicate whether the statement is true or false